“Conflict of Interest” – SMMTA: SLAC should be separated from Harbor Group

POSTED: 10/25/13 11:57 AM

St. Maarten – President of the St. Maarten Marine Trades Association (SMMTA) Brian Deher said in a presentation to the Central Committee of Parliament yesterday that the Harbor Group of Companies, which owns the Simpson bay Lagoon Authority Corporation (SLAC), is also a direct competitor with marinas and services in the lagoon area and can therefore “set up roadblocks with us and make it easier to do business with them,” Deher complained. “They can set up situations of unfair competitive advantage. It’s a conflict of interest.”

The Harbor Group has slips at the A C Wathey Cruise facilities which were built after SLAC came under their authority, Deher pointed out. And several boats that used to home port in the lagoon now dock there instead. “If you’re regulating the industry, you shouldn’t be competing with it.”

But the biggest way they compete, Deher said, is through fuel. The Harbor Group sells fuel at its facilities directly competing with marinas in the lagoon. The SLAC bridge fee is just another cost to the fuel bill that many vessels simply avoid. The Harbor Group also does not pay the 5% turnover tax on fuel sales, further adding to the higher prices that marinas in the private sector have to charge. “We feel it’s the government’s responsibility to create a fair business environment,” Deher pleaded to the MPs.

The SMMTA met with the Central Committee in Parliament yesterday to discuss, according to the association, the “survival and growth of the marine industry on St. Maarten as it relates to immigration, visa policies, SLAC, the overall economy, and other marine related issues.” The meeting was requested by Michael Ferrier, who is a board member of the SMMTA. This was a follow up meeting to one held earlier in March which was adjourned and postponed.

“As you all know, the marine sector is very critical to the economy and to the growth of our country,” President of Parliament Gracita Arrindell said.

Deher gave a brief synopsis of where the industry is currently at. “What’s important to understand is that there is a tourism component to it as well as an industrial component, say for shipyards, tug boats, cargo facilities,” Deher said of the marine sector overall. “It’s a very complicated industry, even though those of us in it don’t necessarily understand what the actions of one part of the industry will affect the other parts. For instance, things that may be very good for the mega yacht industry may not be so great for the cruising industry or the shipyard businesses, or vice versa.”

“That’s why we’re here is to continue to open up lines of communication with government so that we all know what our actions and how those actions affect each other,” Deher continued. He explained that the industry has many trickle down affects that contribute to the economy as a whole, “from taxi cabs to nightlife, casinos, provisioning companies. There is a lot of spin off business.”

He also said entrepreneurial opportunities exist for locals to get involved in the marine industry and that more awareness and education is needed. St. Maarten, Deher pointed out, has a lot of natural advantages that make it an attractive location for vessels, such as the lagoon and its geographic location within the Caribbean chain of islands. “It benefits us all to nurture it and understand it,” he said.

Deher explained to the committee that high violent crime rates, like those experienced in 2011, and some of which were specifically targeting mega yacht crew poses a real threat to the industry and can have far reaching economic consequences. The 2012 season, for example, was one of the worst as a result. He said people have other options if St. Maarten becomes a problem island. “They can pick up an anchor and move and we saw that.”

Deher said the inefficient vessel clearing system is an area that needs improvement. Many other yacht destinations have online immigration clearance services for boaters. A lack of street lights and sidewalks in the Simpson bay area is another area with room for improvement.

The contentious bridge fee puts St. Maarten at a competitive disadvantage, Deher explained, because no other place in the Caribbean charges such fees. It doubles up the costs of boats wishing to stay in the lagoon that also have to pay a mooring fee on top of the bridge charge.

Deher said that although SLAC charges fees it provides very little service in return, something which is expected when someone pays for something. There are no garbage services, or dinghy docks provided, for example. The island cannot overlook the basics, he said.

Environmental legislation is also lacking which would protect the lagoon. Deher pointed out that a large portion of the pollution in the lagoon comes from the land, with runoff from the Cole Bay area pouring in.

“The single most important thing that hinders growth in the industry, hinders further investment from any of the companies that are in it, and hinders the opportunity to hire more local people, is the situation with SLAC abusing a situation of control over an industry while simultaneously competing against it,” Deher said emphatically. “But it is an easily fixed situation.”

The SMMTA essentially wants the government to move SLAC from under direct control of the Harbor Group because it sees this as an unfair business practice and sends the wrong signal to potential investors. “We feel this sets a very dangerous precedent for country St. Maarten,” Deher concluded.